Chapter 14 Problem P14-1A

You must complete both parts (a and b) of Problem P14-1A to earn full credit. You must submit your answers in Excel (only one Excel file will be graded – do not submit multiple Excel files). No Word document submissions will be graded.
Please read all of Chapter 14 before beginning this problem. The chapter will provide you with examples of the questions asked within this problem.
Feel free to discuss this problem with the rest of the class here.
P14-1A Ohno Company specializes in manufacturing a unique model of bicycle helmet. The model is well accepted by consumers, and the company has enough orders to keep the factory production at 10,000 helmets per month (80% of its full capacity). Ohno’s monthly manufacturing cost and other expense data are as follows.

Rent on factory equipment

Insurance on factory building

Raw materials (plastics, polystyrene, etc.)

Utility costs for factory

Supplies for general office

Wages for assembly line workers

Depreciation on office equipment

Miscellaneous materials (glue, thread, etc.)

Factory manager’s salary

Property taxes on factory building

Advertising for helmets

Sales commissions

Depreciation on factory building

(a) Prepare an answer sheet with the following column headings.

Product Costs

Cost Item
Direct Materials
Direct Labor
Manufacturing Overhead
Period Costs

Enter each cost item on your answer sheet, placing the dollar amount under the appropriate headings. Total the dollar amounts in each of the columns.
(a) DM $75,000
DL $58,000
MO $22,100
PC $25,100
(b) Compute the cost to produce one helmet.
Classify manufacturing costs into different categories and compute the unit cost.
(LO 2), AP

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